New York, NY
9 October 2012
Cascading economic problems and crises, coupled with dysfunctional political responses, have plunged many societies into deepening turmoil. Capitalism, the dominant economic system of our time, has once again become the subject of criticism and opposition. A global capitalist system that no longer meets most people’s needs has prompted social movements to arise and coalesce in the active search for fundamental and structural change. The establishment responds with what are called reforms. But they are superficial and quickly circumvented. Historically, the various forms of state socialism and communism do not offer a model or inspiration to those looking for viable alternatives. People are seeking new solutions to address capitalism’s injustices, waste, and massive breakdowns. One such proposal is workers’ self-directed enterprises. Production works optimally when performed by a community that collectively and democratically designs and carries out shared labor.
This lecture and interview are available as a CD or mp3 or transcript from Alternative Radio
Richard Wolff is Professor of Economics Emeritus at the University of Massachusetts in Amherst and currently a visiting professor at the New School in New York. The New York Times called him “America’s most prominent Marxist economist.” He is the author of numerous books including Capitalism Hits the Fan, Democracy at Work, and Occupy the Economy: Challenging Capitalism with David Barsamian.
You can listen to Richard Wolff speak for himself here.
I’m going to begin by talking a little bit about the failures of the capitalist system we live in now. We can compare this crisis with the last time our capitalist system collapsed. That’s the 1930s. And that has to be brought back, because that’s the only standard, the only equivalent we really have to make sense of what we’re going through now. Like with everybody, you make sense of a crisis now if you can think of a similar crisis that you or your friends or your family went through at some other point. That’s what we do.
An interesting thing happened in the 1930s. Capitalism tanked. It fell apart. It lasted for years—12 years, 1929 to 1941. But there was a big difference. After 4 or 5 years of that crisis, something happened in America then that hasn’t happened yet again. The mass of people reacted and got involved. You had in the U.S. what you now see in Greece or Spain or Italy, and so on. People in the streets. There were demonstrations of tens of thousands, and sometimes hundreds of thousands, in Union Square, just a few blocks from here. Week after week.
There were three kinds of organizations that got involved. There was the union movement. In a short period of time tens of millions of Americans who had never been in a union before joined a union. The organization was called the CIO, the Congress of Industrial Organizations, which went to the masses of people and said, You’re being really shafted in this crisis. You’ve lost your job, you’ve lost your benefits, you have no money. The union is the only institution that’s going to help you, so you’d better join it and make it strong, because it’s your only chance. Millions of Americans agreed and joined.
The second kind of organization was a group of parties who used the name socialist, socialist parties of various kinds. They basically said capitalism is a system that’s no good. We need an organization to either force it to change or to go beyond it.
And the third organization was the Communist Party, which said more or less the same thing but pushed maybe a bit harder.
There was lots of overlap among the CIO and the socialists and the Communists. They worked together, and they represented tens of millions of people. They said to the president, Roosevelt,
You’d better do something for the mass of people. None of this crap about bailing out the big banks,
which he was doing, and helping the big corporations, which he was doing.
That’s not enough. You’ve got to do something for the people at the bottom, the millions unemployed, the millions losing their homes through foreclosure and so on. And if you don’t,
they wagged their fingers at him,
then we socialists and Communists, we’re going to overthrow this system.
And to make the point, they pointed over there to Russia, where this had happened a little while earlier, and said,
Don’t think it can’t happen here.
Mr. Franklin Delano Roosevelt. He heard these people. He knew they represented tens of millions. So what did he do? Very important. He went to the corporations and the rich and he said to them—they didn’t want to hear it, he knew that, but he came from that group, he knew them all personally—
You have to give me a lot of money right now. A lot. And not only do you have to give me a lot of your money, but I’m going to use it to help the mass of people.
Guaranteed to be a tense meeting.
And here was his argument.
You’d better do it, because if you don’t, down the road behind me are coming the socialists and the Communists, and they’re going to offer you a lot worse deal. So here’s what. You give me a lot of money. I’ll take care of them. I’ll help the mass of people the way they’ve never been helped before. But on one condition I’ll help them. Don’t mess with capitalism. Let the industries be the way they are, with the major shareholders having all the power to select the board of directors, which makes all the decisions. Leave that part of capitalism alone.
He split the rich people in the corporations. Half of them bought his argument. They were scared. They saw the same demonstrations in the streets. Half of them never bought the argument. They became the implacable enemies of Mr. Roosevelt, the people who now control the Republican Party, but who were doing that all the way back. But it was enough to get half of them. And Roosevelt went to the socialists, Communists, and CIO and said,
Okay, we’ve got a deal.
And they said
Yes, we’ll downplay the revolution.
Not all of them, but most of them did.
Roosevelt created the Social Security system. He said to Americans,
If you’re over 65 and you’ve spent a lifetime working, I’m going to take care of you for the rest of your life.
In the midst of a depression, when there was no money, like the people say today, the government said,
I’m going to give you all money, a monthly check, you old people, until you drop dead.
No one ever heard of that before. A public pension for everybody. Telling the old people,
You’re not going to have to live on cat food and your children are not going to be burdened by taking care of you. We’re going to take care of you.
No sooner was that done than he announced the development of an unemployment compensation system. That had never been done before either.
You lose your job, we’ll give you a check every week, for a long time. Have a nice day.
No sooner was that done than he said,
And now the icing on the cake. I’m going to create and fill 12 1/2 million jobs and give you all work.
Where did the money for this come from? He taxed the corporations and the rich. And what he didn’t get from them in taxes, he borrowed. And there was no discussion. They didn’t say,
Maybe I’ll lend it to you.
No, no, no, no, no. You’re giving it to us.
And that got us out of the Depression, with neither the revolution of the left, which they feared, or the fascism from the right, which they were also worried about, because that’s what had happened in Italy and in Germany.
But—and here comes the punch line—they never touched the corporation and how it’s organized. They left in place the major shareholders and the board of directors. And guess what happened? The board of directors and the shareholders didn’t like this deal that Roosevelt forced down their throat. They accepted it, but they weren’t happy. And by 1945, which is only a few years later, Roosevelt dead, World War II over, the corporations, shareholders, and boards of directors went to work to undo everything Roosevelt had done.
How did they do it? Number one, they went after the socialists and Communists. They knew who made Roosevelt do what he did, and they destroyed them. Which is why those political parties are as small and as weak today as they are in this country. And they went to work to destroy the labor movement, which is why it is as small and weak today, having had 50 years of decline. They knew that was the basis on which Roosevelt acted, so they had to destroy that basis. They had to destroy the organization of the working class from the left. We live in the results of that. While that was being done, they undid the New Deal. They passed the bills, the laws, they attacked, they took it away. The regulations were deregulated. The government activity was privatized. They took all the steps necessary.
There’s a lesson there, isn’t there? The lesson is, if you don’t change the organization of enterprises, then even when you’re lucky enough to get a better system, a capitalism that you might call capitalism with a human face, one that gives you a pension when you’re old, that gives you unemployment compensation when you lose your job through no fault of your own, one that provides jobs from the public sector if the private sector can’t do it, that kind of a capitalism that you can win if you fight hard, as they did in the 1930s, will then be taken away if you leave those people in power.
Why? Because they’re nasty people? No, no, no. If you’re the head of a corporation, your job is to make money. The regulations passed by Mr. Roosevelt were impediments for a business. They wanted to get around those regulations. They made it harder to make money. They didn’t want to pay those big taxes. That meant money they couldn’t use to build the enterprise. So they saw these things as obstacles, which they worked to overcome. So, of course, they did what the system makes them do: They undid it all.
The best metaphor for this comes out of American history. And it’s the fight against slavery. In the fight against slavery in the U.S. there was an antislavery movement, and it split into two parts. One part of the movement against slavery in the U.S. was horrified that slaves weren’t fed very well, they weren’t clothed very well, their families were split up, they were bought and sold, all those terrible things, and they wanted slaves to be better treated. The other people who were against slavery were horrified by that approach. They said,
Are you crazy? The problem isn’t that the slave doesn’t have the right diet. The problem is that he’s a slave. And if all you do is give him a better diet by forcing the slave owner to feed him better, then you’re leaving the slave owner in the position to reduce the diet next month, next year. You’ve left in place the institution that can undo whatever you achieve. That’s not smart.
That second group finally persuaded Mr. Lincoln. So he didn’t pass a law improving the condition of slaves, he abolished slavery.
If you want to deal with the crises of capitalism— with its injustice, its inequality, its fundamental instability, its waste of people and resources—then you can’t just pass a regulation or apply a tax. You’ve got to deal with the decision-making institutions. Because if you don’t, you cannot win this struggle. Therefore, my proposal is, we’ve got to do that. We’ve got to change the way enterprises are organized. No more shareholders, no more people who control a block of shares and can then pick the board of directors, who make all the decisions, that the rest of the workers, the vast majority, simply have to live with. That’s out. We can’t tolerate that. We’re not going to struggle another 10 years to reimpose the regulations and taxes that our forefathers and foremothers did in the 1930s only to have them undone again. This is absurd.
We have to learn from what they didn’t do and not make that mistake again. That means changing the way enterprises are organized. Don’t shy away from it. Don’t say,
Oh, it’s a big job.
Because the alternative is it won’t work. We’re living that result. We’re worse off now, because not only do we have a crisis of capitalism, but we have no organizations of the left comparable to the CIO, the socialists, and the Communists. So no one is helping us now. We’re just standing there looking at it all and shaking our heads. So capitalism needs now to be confronted. We have to change the way we organize enterprises.
The proposal here is very simple. Enterprises should be run with the decisions made by the workers in them—collectively and democratically. If 100 workers work there, then the 100 workers make those decisions. If 10,000 work there, they make the decisions. I’m going to come back to that, but that’s it. We call those worker self- directed enterprises. No more board of directors and shareholders. The workers become their own collective directors of activity. Every worker has two job descriptions: whatever tasks he or she does in the division of labor in the office, the store, or the factory, plus every worker’s participation, full and equal with every other worker, in the decisions of a director: what to produce, how to produce, where to produce, and what to do with the profits.
And before I go into it, which is what I’m going to do for the rest of my time today, I want to tell you that this is not only the solution to the inefficiency and instability of capitalism, the way I’ve stressed; it is also a solution to the problems of classical socialism.
Quickly let me review. The Soviet Union is a prime example. What did they do? They said,
We’re going to get rid of private property in the means of production, and we’re going to have it taken over by the country as a whole. We’re going to socialize the means of production. We take them away from the private owners and run by the state in the interests of everybody.
And the second thing they said is,
We’re not going to allow the market to determine who gets what. That’s going to be done by government planning instead of markets planning. Instead of private property, socialized property.
That was the plan. That’s what the Russian Revolution introduced, that’s what the Chinese Revolution introduced, that’s what the Cuban Revolution introduced, and so on.
What did it do? It did many things. I wish I had the time to go into it—and sometime I will. But here I want to make a central point. It had also profound flaws. First, it didn’t change the organization of the enterprise. The board of directors selected by the shareholders was gone. But in its place the government put in commissars; it sent people that were government officials. The enterprise now had a board of directors, but they weren’t elected by shareholders, they were selected by the government. That didn’t change. The workers still came to work five days a week, produced, and the decisions about what to produce, how to produce, where to produce, and what to do with the profits was made by the government officials.
Likewise, when you give such power to the government, the power to own the means of production and the power to distribute goods and services, you’re giving the government a stunning amount of power. And unless you’re awfully careful, they’re going to use that power in ways you’re going to come to regret, which we all know happened. So you’ve got to come up with a way to make sure that this problem doesn’t exist. And it’s all the more powerful because we know that in the end those systems have dissolved, not by external attack, but by the weight of their own contradictions. Russia imploded, China is going through a fundamental shift, Cuba likewise.
So what do you do? I have the same answer. You transform the enterprises. You make them run by the workers themselves. That creates the political power at the base of society that’s a counterweight to the government. The only way the government can survive is then to get taxes from the enterprises owned and operated by the workers in them. Then the government can’t do whatever it wants. It has to come to terms. It’s an institutional way to overcome the concentration of power at the top. And it’s an institutional way to transform the tensions of enterprises, which survive because government officials are just as odious as the people elected by shareholders in many cases. So you’ve overcome that. So this is a proposal that addresses not only the failures of capitalism but the failures of its major 20th century alternative, classical socialism, and maybe is the basis for a whole new idea of what socialism will represent in the 21st century, which is not centralized planning, but rather workers becoming finally the masters of their own lives.
What would that mean? Let me just tantalize you with some of the delicious possibilities. Let me begin with the easier ones. Do you think the workers, if they were sitting around in an office, a store, or a factory, would decide,
Hey, I’ve got an idea. We can make a bit more profit than we’re making now if we just shut down this workplace and reopen in China.
Unlikely. The self-destruction of people doesn’t usually go that far. They’re not going to do it. They’re just not going to do it. What an interesting idea. They’re not going to do it.
Here’s another thought. What if a new technology for whatever the company makes is introduced but it happens to have a side effect, it pollutes the air or it pollutes the water or it introduces a machine that is too loud are or a chemical that is toxic? Now, if you had a board of directors elected by shareholders sitting in New York or L.A., they might say,
Well, it will make more profit. We’ll tell the workers we have a fan. Don’t worry about it.
Yes, but the workers, if they made the decision themselves, since they have to breathe it, and their wives and husbands and children and neighbors, not so quick. If you want to do something about environmental degradation, here’s a way to do it. Just like if you want to do something about jobs leaving the country, there’s a way to do it.
But I’m just getting started. Here’s a bigger one. Do you think if the workers sat around together making the decision of how to divide the profits that they all produce, which is what we’re talking about, that they would give a few officials at the top, managers, tens of millions of dollars in wonderful pay packages—wages, salaries, stock options, bonuses—and everybody else struggles to get by? I don’t think so. If the decisions were made democratically, you know what? They would distribute the profits much more equally. Some would get more and some less, of course, but they wouldn’t be giving some people $25 million a year and everybody else nothing. They wouldn’t do that.
The single most powerful way I can think of to do something about the inequality of wealth and income in the U.S. that almost everybody complains about would be this idea. Because if you made the collective of workers in every enterprise distribute the wealth, they would never distribute it as unequally as is now done by the boards of directors, who give themselves the monstrous salaries. If you want to do something about inequality, do this. Do this. What an amazing thing.
Let’s talk about it some more. How might it work? Here are some questions that are raised that I want to answer.
Gee, it takes a special skill to be a director. You kind of have to know the bigger picture. You can’t go to East Tennessee State Community College. That’s good for working at the bottom. But if you want to be a director, you need to go to Princeton or Harvard or places like that.
Here’s the very old idea: The mass of workers isn’t competent to run a business. This should sound familiar to you. For those of you who remember the history of how we in Western society finally got over 1,000 years of kings and princes and emperors and czars and we got to this idea that everybody should have a vote, there were always those conservatives who said,
Are you crazy? Running a country is something you need to be a king to do. An average schmuck [or whatever the equivalent was] can’t do that. If we don’t have the king, who [as we all know and as they reminded us] talks to God almost as often as Republicans do, then our society will fall. We can’t leave power in the hands of the average person. They’re too stupid, they’re too undereducated.
The eventual answer of the mass of people was to separate those kinds of folks from their own heads, which ended the argument definitively. And we went on to have a voting system, which we call democracy. And guess what? Society didn’t fall apart, civilization didn’t come to an end. All of the dire predictions about the incapacity of the mass of people to participate in their own governance turned out to be, to use a technical term from political science, bullshit.
I’ve got a thought for you. The incompetence of workers to manage their own workplace is the same argument, it’s the same silly idea. You think the people who run America’s enterprises were born with the capacity to govern the enterprise? Stop. We have colleges for them. We have specialized programs/degrees for them called master of business administration. That’s where you learn to do these things. You have to learn it because nobody knows it. It’s something you learn. It doesn’t take very long. And most graduates tell you, We didn’t learn all that much, but it was good to go because I made good connections. Oh, I see, that’s what it’s about— connections. The learning part is very little.
Here’s a thought. You could organize enterprises so that not only did everybody participate in directing but that there were ongoing courses available to everybody, all the time during your work life where, if you felt deficient in any area, there would be people who would, in whatever way you like, teach you this, precisely so that everybody could participate. Your job and your education would be woven together. Going to work would also be going to school. What an interesting idea. You might go to a job to learn something; it might be exciting. The bar that you pass on the way home from your job would no longer advertise happy hour, because you knew what the hours were before you got there, because you would begin to be, I don’t know, happy at work. Can you imagine? Because you would be learning, you would be participating, you would be exploring your own capabilities.
Here’s another thought. The work is divided, but the people don’t have to be. We can rotate everybody. You can be for a while this job and then a while that job. You know why? Because it stultifies your brain to always do the same thing. You want variation. Not just from this technical work to that but from running the place to letting someone else run the place, maybe while you’re taking a course to become another kind of worker because you would like to try that, you would like to develop your skills. What an interesting idea.
Now let me address another dimension of this. And you see what I’m doing. I’m making the best case I can for this. And I have to, because it’s either ignored or dismissed when there’s no justification for either. Here’s another argument that is made.
These things might work, but it’s only on small enterprises. Five people could do it, maybe ten, but anything bigger than that, no. And if you look around, most co-ops that you see where people try to do it, they’re kind of small, you know.
I love this argument.
The answer to this argument is just the history of capitalism. Capitalism grew out of another system in Europe called feudalism. Most of Europe for, say, the period from 500 to 1000 A.D., was feudal. Big or not so big plantations—feudal manors they were called—big areas of land, lots of serfs. When capitalism grew, when capitalism emerged, depending on how you count, 16th, 17th, 18th century, guess how it started everywhere? Small. A capitalist with three workers or six workers or nine workers. And feudal lords all congratulated themselves. Yes, it’s scary, but it’s little. It only applies to little. Guess what? It starts little, but it gets big. It manages, it makes adjustments, but it manages.
Is that possible for co-ops? Sure it is. Why in the world would you assume otherwise? And in case you did, let me give you the example. It’s called the Mondragon Corporation in Spain. It’s a worker self-directed enterprise. And how many people work for the Mondragon Corporation? One hundred twenty thousand, thank you very much. Over 50 years. They started as six people in the north of Spain, a priest and six people. Not an auspicious beginning—a priest, six people. Not good. But here we are. They are now the largest corporation in the north of Spain and the seventh largest corporation in all of Spain. Did they manage the transition from small to big? Yes.
Here’s another topic.
Well, these things are very nice and people would love each other and it would be charming, but it could never compete with capitalist enterprises. They can’t. How are they going to compete with a tough capitalist enterprise?
And the answer is easy. Let me explain. I’m sure nobody in this room would qualify for what I’m about to say, but some of you know a little bit that if you work in a capitalist enterprise, it has been known to happen that at the end of the day when you go home, you take a stapler with you, don’t you? Some of you are smiling. You’ve heard of it. I’m sure you never did it. Or are a ream of paper or a pen or a chair, or a computer component, right? And you do that for all kinds of complicated reasons. But you rob the employer blind. Every employer knows it. In case you’re not aware, the biggest source of theft, most corporations of America believe, is their own employees, who are of course in the best position to do that. And they do.
Suppose you as an employee of a capitalist enterprise notice on your way out of the office that the lights are all on and you remember the employer giving you a memo or six telling you,
If you see the lights on before you go home, turn them off.
To which your response is,
Screw you. Why the hell should I turn off the lights? It’s not my problem, it’s your problem. The mice need to see where they’re going. And I like mice, and I don’t care that you don’t like mice. And I could spend a lot of time at night trying to figure out a better way to make something, but why should I do that? It would just help you and your profits. I’d rather watch the presidential debate.
So what would happen in a collective enterprise run by the workers? It’s their own enterprise. Of course they’re going to turn off the light. And what the hell would they steal for? They’d be stealing from themselves. And when they can figure out a better way to do something and it makes the business more profitable, it’s their business. We say that in America. We say it’s not good to rent a house, it’s better to own the house, because if you own the house, you care more about it. Oh. If that’s true, then it would make sense in the enterprise, too, wouldn’t it? How come it doesn’t apply there? Because it scares the people who own the enterprise. They don’t want you to think like that. It’s fine to think that about your house, just not where you work. It doesn’t work, friends. That’s illogical.
Here’s another difference. When a capitalist enterprise prices what they produce, a good or a service, they have to cover the costs of the materials that go into it, of course, and they have to cover the labor, the wages they pay their workers. But they have to cover something else: the profits they give to the shareholders. The price has to be high enough to generate the profits. But a worker-owned and -operated enterprise doesn’t have shareholders, doesn’t have to raise the price to cover the distribution of profits to the shareholders. So their price can be lower, which will enable them to outcompete the capitalist. Ha, ha, ha, ha, ha. Look at that. It turns out that they can compete quite well.
And again, here’s the clue. Mondragon Corporation has an iron rule, which they explained to me when I visited there in May 2012. Every co-op enterprise within the large Mondragon corporation has to compete in the larger capitalist economy. No unit of the Mondragon Corporation will buy from another unit if they can get a better or a cheaper equivalent from a private capitalist enterprise. So everyone inside that corporation had to be competitive. And they were. That’s how they got to go from 6 to 120,000. They were successful capitalist competitors.
In San Francisco there’s a group of six bakeries called the Arizmendi Bakery. They’re all worker co-op, self-directed enterprises. Arizmendi, by the way, is the name they chose because it’s the name of the priest in northern Spain who started Mondragon, and it was in honor of him that they took that name. They’re very competitive. If you go to them, you get an espresso and a Danish or a croissant whatever it is you want, and you can do it at a competitive price. And they’ve been growing. They’ve made enough money with the bakeries—they started with one—and now they have six. So competition, not a problem.
The last couple of points. How do people feel who work in such a place? Not a minor matter. Here I’m going to give you some evidence from an American example that most people don’t know about and that even the people involved in don’t think about in the way I’m talking. The example comes from the Silicon Valley of California. Every year engineers, typically highly trained, well paid, working for big telecommunications and computer companies, quit their jobs. And together with 10 or 20 others they take their laptops and they gather in somebody’s garage, who has an extra garage, and they say,
We’re going to set up a new enterprise.
When you talk to them, here’s kind of the story you get.
We hate working for IBM or Cisco Systems or whatever, Oracle. We have to wear a tie and jacket. Ugh. We have to come at a certain time. We have some jerk sales manager telling us what we should invent in the way of software. We can’t bring our dog, we can’t bring our toddler, we can’t bring our Frisbee, and we’re not supposed to come high.
And if you know what an engineer in California is like, these are serious limits on what he or she would like to do.
But worst of all, we don’t like what we’re told to do. We have no freedom. We don’t do very good work. We hate this. All we get is a lot of money. But you know something, we don’t need that much.
They quit, and they set up a little enterprise.
It’s very interesting what they do. They set up an enterprise in which they say everyone here is equal—no boss, no supervisor, nobody tells anybody else what to do.
We get together on Fridays and we decide what we’re going to do and how we’re going to divide the labor. And we decide what to do with the profits from the software that we create. We can come to work the way we want. Loud Hawaiian shirt and louder Bermuda shorts. We are flying because we drank or ate or smoked something before we came to work, and we brought some with us. We have two toddlers. We’re not sure who they are, but we brought them. And we have six dogs. And we play Frisbee with the dogs and with the toddlers all day long and have a wonderful time.
Seriously, here’s what they say.
We are more creative than we have ever been. We’re free. We work out what we want to do together with engineers like ourselves who know what the issues are, what the problems are, what a reasonable solution might look like, what way to go. And we can work together. We make less money, but we love our work. We wouldn’t trade it for a million bucks. Wow. We’re more creative and we love our work.
Why are you more creative?
Well, we can invent, we can explore, we can do what we wanted to do when we went into this kind of work.
And then they point out something very powerful. I remember it blew me away when I first heard it.
We have made break-throughs in this little enterprise of 20 or 30 laptop users. We’ve made real break-throughs. And we’re angry, because the big businesses, the Oracles, the Cisco Systems, and all of them, claim they’re at the forefront of technological break-through. Crap. It’s not true. We’re the place where the break-throughs happen. In order to make a break-through, you need a different way of organizing.
Aha, listen to what they’re saying. These people have walked away from a capitalistically organized enterprise. And you know what they’ve created? A worker self-directed enterprise.
When you talk to them and you tell them,
You know, you have abandoned capitalism,
they get a sad, kind of hang-dog look, because it turns out that most of them are Republicans. They are. And they refer to what they have done as being—ready?—entrepreneurial innovators. And I always say when I talk to them,
I don’t care if you think what you did was invent a chartreuse banana. You can call it anything you want. You have done what was the dream
—and this gets them really upset—
of Karl Marx. And on behalf of Marx, who’s not around to tell you, I want to say to you thank you. Very good of you to do this, because it allows people like me to use you as an example,
just as I’m doing now.
So here we have this newborn kind of enterprise in our midst here in the U.S., proving that if you give American workers half a chance, choose you, American worker.
You want to go to work in a top-down, hierarchical capitalist enterprise? Be my guest. But if you would rather try to work in an environment of equals who make the decisions, where you can be a director as well as a drone, well, you could try this.
Of course, you could only try them if the U.S. gave you the freedom of choice, which it doesn’t. We believe in freedom of choice in the supermarket, where there should be 27 varieties of toothpaste that you can choose among.
But two different ways of organizing your work life? No, thank you. We don’t need it. Capitalism, as we all know, is the greatest system since sliced bread, and therefore no improvement or no alternative is needed.
That was a joke, friends. Sarcasm, okay?
So it turns out that if you give workers a chance, they will make these choices. They will surprise you. And when you think about it, it’s not so hard to understand why. Could it be done in the U.S.? Of course it could. Is this a feasible arrangement? No problem at all. So for those of you who think I’ve painted a lovely picture but it can’t be realized, I gotcha.
Here’s how we do it. We take some precedents from other places that have done it. First, let’s facilitate all the ways that working people who have a little money saved up could pool it to start the money they need to go into business as a collective, as a cooperative. Here’s another thought. Let’s borrow from an Italian law. It’s named after an Italian legislator, Marcora. It’s called the Marcora Law. Here’s how it works in Italy right now. It’s been on the books there since 1985. It works like a charm in Italy. They wouldn’t let it go. Here’s the deal. If you become unemployed in Italy, you have a choice. You can get a weekly unemployment check, just like we do in America. That’s choice one. But there’s choice two. Here in America there is no choice two. That’s because we believe in freedom of choice. Italy has a choice two. Here’s the choice. The Italian government will give you your entire two to three years of unemployment benefits, weekly check, in a lump sum right now at the beginning. You agree that you will make no more claims on the Italian government for unemployment; you’ve got your whole sum of money. And they will give it to you on one condition—that you find at least nine other unemployed people just like you who will agree, just like you, to take a lump sum, and then you agree to use the lump sum as capital with which to start a worker self-directed collective enterprise.
The argument for the law is, if workers start their own enterprise, they will work five times harder to make that successful than they would if they went to work as an employee for someone else. An interesting assumption, if you think about it. That’s the law in Italy. That’s how a lot of worker directed co-ops that exist in Italy today got started.
We could do that. We could do that. One more time. We could do that.
Here’s another thing we could do. We could take a page from the existing law in the U.S. We have in this country, as you know, the Small Business Administration. The idea is that big businesses have advantages over little ones in America and the little ones need to level the playing field. So there’s a special branch of the government to give the small businesses cheap loans, technical advice, to give them some help. We’ve been doing that for many decades in America.
Here’s another one: the Minority Business Administration, to help minority businesses get off the ground.
I’ve got a thought. A worker self-directed business administration, whose job it would be to give Americans a chance for a choice by creating and funding and giving technical help to workers’ cooperatives around the country, Americans could see what they look like, how they work, what it’s like to work there.
I have another thought. We could require labels on all our products. And the label would now say not just “Made in China” versus “Made in Brooklyn.” It would say “Made by a capitalist enterprise” or “Made by a worker collective enterprise.” And we as buyers could choose which kind of enterprise we wish to support. What a lovely opportunity to exercise our freedom of choice, which we don’t have, but which we talk a lot about. Which is a human characteristic. The more you miss it, the more you substitute bullshit about it, because you feel so sad that you don’t have it. We could do all those things. So is it possible to do? Yes. That would be the way to do it.
Finally—and I want to make sure that this point is as clear as I know how to make it—to bring worker self-directed enterprise organization to American enterprise is also a historic act that a generation like ours, yours, could and should and would be proud of, because what you’re doing is you’re completing the otherwise terribly incomplete democratic revolution of the last 300 years. Something terrible happened to democracy as we moved in that direction as a reaction to the absolute monarchies of Europe that we came out of. We said there would be democracy in the places where we lived, in our cities and towns, in our countries. We would have voting, we would give people power.
But we never brought it into our economic system. We allowed enterprises to develop in which a tiny group of people, the major shareholders and the board of directors, make decisions like kings. The rest of us all have to live. If they decide to close the factory, our jobs are gone. If they decide to use a toxic technology, our health is gone. If they decide to distribute most of the profits to a few people, our equilibrium with other people in the society is gone. We have to live with those decisions, and we participate in them not even a little.
Capitalism as a way of organizing an enterprise is fundamentally antidemocratic, and it’s always been like that. So if you have a commitment to democracy that’s more than verbal, you have a problem with capitalism, and you need to think about worker self-directed enterprise as the antidote, as the way finally to bring democracy to the workplace.
And isn’t it strange that it hasn’t always been there? Where do we all as adults spend most of our lives? Five out of seven days we go to work. For most of the hours of that day, we’re either getting ready for work or we’re at work or we’re recuperating from work. But work defines us. And if you have a commitment to democracy, that would have been the first place it ought to have been institutionalized. Not left out. To leave the workplace out of democracy is to undo your democracy. And you all know it. We all live in a country now that is stunning. The vast majority of people are polled by Gallup, by the CBS folks. We know what the majority of Americans think, and we know that our political leaders simply ignore it. The majority don’t want to be in Afghanistan. We’re there. The majority long ago stopped supporting the Iraq war. We’re there. The majority think the distribution of wealth and income in America is inappropriate. Who cares?
We know why. We know that if you have a political system that tries to be democratic superimposed on an economic system that isn’t, the economic system wins that struggle. It buys the political system. It makes sure that the political system cannot function democratically. Because if it did, then we would use our democratic power in politics to undo the effects of economics. If the economy made a few people superrich and the rest of us not, we would use our majority power in politics to undo that.
In a sense that’s what happened in the 1930s. The rich long ago figured that out. They use their money, their capitalist positions, to control the politics. To democratize the economy, you have to democratize the enterprise. And if you don’t do that, then your commitment to democracy is as shallow and as formal as our actual democracy is. The form is there, the content isn’t.
If you have found even some of these arguments in favor of an alternative way to organize enterprise, as a serious way to address many of the economic and social problems of our society that are now impacting every life in this room, then do me a favor, think about this. And talk to people about it, which is the best way to spread this. But for those of you that have wondered: There’s no alternative to this system that is so painful, that is so inadequate, there is. And if people begin to understand that and push for it, there’s no end to what we can do.
One personal note. As I hope you can see from the way I present these ideas, I am having the time of my life. And there’s a simple reason. My message isn’t different than it was 5 and 10 years ago. So that’s not the reason. The reason is that audiences across this country keep expanding with their numbers, their enthusiasm, and their openness. Something is shifting in the United States on a scale I have never seen in my lifetime and I was born here. Way better than anything that happened in the 1960s. So don’t feel down, this is an opportunity the likes of which do not come but once in a long while. This is a country that is changing.
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